Is The Cost Of Living Adjustment Enough?

The annual cost of living adjustment was introduced in 1975 and is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W tracks how much consumers pay for goods and services.

“Today’s 2 percent COLA announcement gives some relief to Social Security beneficiaries and their families who depend on their earned, modest benefits. Since 2011, beneficiaries have received little to no increase—never more than 1.7 percent,”said AARP CEO Jo Ann Jenkins in a statement Friday.

She continued: “For the tens of millions of families who depend on Social Security for all or most of their retirement income, this cost of living increase may not adequately cover expenses that rise faster than inflation including prescription drug, utility and housing costs.”

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